Many active taxpayers in Pakistan recently discovered their ATL (Active Taxpayer List) status became inactive in March 2024. This can be concerning, especially if you’re diligent about filing taxes. Here, we explore the three most likely reasons for this sudden change and how to rectify the situation:

Understanding ATL Status:

The ATL is a database maintained by the Federal Board of Revenue (FBR) in Pakistan. It identifies taxpayers who are compliant with their tax obligations. Having an active ATL status is crucial for various reasons, including:

• Applying for loans and other financial services.
• Participating in government tenders and contracts.
• Avoiding delays in tax refunds.

Reasons for Inactive ATL Status:

1. Late Tax Return Filing: The most common reason for an inactive ATL status is filing your tax return after the deadline. In Pakistan, the deadline for filing tax returns for tax year was October 31st. If your return for the 2023 tax year was submitted after this date, your ATL status might have been deactivated.

2. Unfiled Tax Return: The most extreme scenario is not filing a tax return at all. This is a serious offense and can lead to penalties and legal consequences.

3. Unpaid Late Filing Fee: Even if you filed your return late, there’s a provision to pay a late filing fee and regain your active ATL status. However, if this fee hasn’t been paid, your status might remain inactive.

Example:

Let’s consider Mr. Khan, who typically files his tax returns on time. In 2023, due to unforeseen circumstances, he wasn’t able to file his return until November 15th. This falls after the October 31st deadline. As a result, his ATL status might have become inactive in March.

Resolving the Issue:

Here’s what you can do to regain your active ATL status:

• Check your filing date: Verify the date you filed your 2023 tax return. If it was after October 31st, 2023, you’ll need to pay the late filing fee.
• Pay the late filing fee: You can pay the late filing fee online through the FBR website or at designated banks.
• Contact the FBR: If you’re unsure about the reason for your inactive status or encounter difficulties resolving the issue, contact your nearest FBR office or contact TaxationPk helpline for assistance.

Important Update: After implementation of Finance Act 2024 FBR added the Late Filer Category. Any taxpayer filing tax return after its due date will now be marked as Late Filer.

Late Filer will have same tax rate as of Filer for now except for property buying/selling transactions.

Staying Active:

• Timely Filing: Ensure you file your tax returns well before the deadline each year to avoid any complications.
• Record Keeping: Maintain proper records of your income, expenses, and tax payments for easy reference.
• Professional Help: Consider consulting a tax advisor for personalized guidance, especially if you have a complex tax situation.

By understanding the reasons for an inactive ATL status and taking prompt action, you can restore your active status and ensure a smooth tax filing experience. Remember, a little planning and proactive behavior go a long way in maintaining good standing with the FBR.

Also Read: Pakistan Tightens Tax Regime: New Late Filer Category